The improvement in market sentiment is mainly due to investors' interpretation of US trade policies. Although the Trump administration is considering implementing equivalent tariffs on some trading partners and specifically naming Japan and South Korea, the new tariffs may be delayed until April, leading the market to believe that the negotiation window still exists.

US reciprocal tariffs may be a negotiation strategy, and the market is cautiously optimistic

US President Trump has instructed the government to consider implementing "equivalent tariffs" on multiple trading partners, with Japan and South Korea being specifically mentioned. However, market analysts generally believe that this is more of Trump's negotiation strategy than an immediate policy.

The nominee for US Secretary of Commerce, Howard Lutnick, said that the tariff assessment work may not be completed until April, which has temporarily relieved investors.

Trump is attempting to achieve global trade fairness through reciprocal tariffs, but investors are beginning to realize that this strategy is more of a negotiation tool than an imminent policy. "- Jose Torres, Interactive Brokers

In addition, Trump also met with Indian Prime Minister Narendra Modi at the White House to discuss India's procurement of US oil and gas. However, this meeting was overshadowed by the impact of tariff policies, and the market's focus remains on the latest developments in trade tensions.

Market dynamics: US bonds remain stable, gold approaches historical highs

US treasury bond bonds: US bond yields remained stable in early trading in Asia, following a rise in the market the day before. Australia and New Zealand treasury bond bond yields fell early Friday.

Foreign exchange market: The US dollar index has not changed much, and the Japanese yen has given up some of its gains against the US dollar from the previous day.

Gold market: Gold prices have risen for the second consecutive day, approaching the historical high set earlier this week. Since the beginning of this year, gold has been driven by safe haven demand and has repeatedly broken records. Goldman Sachs analysts even believe that gold prices are expected to test the level of $3000 per ounce.

Crude oil market: Crude oil prices rebounded slightly on Thursday, ending their previous downward trend. Despite the uncertain timing of Trump's tariff plan, the easing of supply risks from Russia provided support for oil prices.

Inflation data suggests that the Federal Reserve's policy may be more moderate

The latest Producer Price Index (PPI) released by the United States exceeded expectations, but the core data that affects the Federal Reserve's policy is relatively mild, so the market believes that inflation risks may not be as serious as they seem on the surface.

The PPI index in the United States rose higher than expected in January, and some market participants expressed concerns about this. However, the personal consumption expenditure price index (PCE), which the Federal Reserve is more concerned about, may perform relatively mildly, especially in areas such as healthcare and airline ticket prices where there has been a decline.

Although PPI is higher than expected, the key PCE data is weaker, and PCE is the indicator that Fed Chairman Powell and decision-makers are truly concerned about. Therefore, the actual situation may be more optimistic than the data looks. "- Andrew Brenner, NatAlliance Securities

The Federal Reserve will release its latest PCE index on February 28th, and the market generally believes that if the data is lower than expected, the Fed may be more inclined to maintain a moderate policy rather than further tightening monetary policy.

FXCUE Editor's Opinion: Market sentiment has eased, but trade situation remains uncertain

The core inflation data PCE that the Federal Reserve is concerned about may be lower than market expectations, which may mean that the Fed will not rush to raise interest rates, and may even consider cutting interest rates in advance. The strengthening of this expectation has also become an important driving force for the recent recovery of risk assets. Overall, although market sentiment has improved, the uncertainty of global trade policies remains high, and it is still necessary to closely monitor the US policy trends and the response of major Asian economies to tariff policies in the coming months.